Correlation Between Voya Target and Qs Moderate

Can any of the company-specific risk be diversified away by investing in both Voya Target and Qs Moderate at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Voya Target and Qs Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Voya Target Retirement and Qs Moderate Growth, you can compare the effects of market volatilities on Voya Target and Qs Moderate and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Voya Target with a short position of Qs Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Target and Qs Moderate.

Diversification Opportunities for Voya Target and Qs Moderate

0.63

Correlation Coefficient

Voya Target  Qs Moderate

Poor diversification

The 3 months correlation between Voya and SCGRX is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Voya Target Retirement and Qs Moderate Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qs Moderate Growth and Voya Target is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Voya Target Retirement are associated (or correlated) with Qs Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qs Moderate Growth has no effect on the direction of Voya Target i.e., Voya Target and Qs Moderate go up and down completely randomly.

Pair Corralation between Voya Target and Qs Moderate

Assuming the 90 days horizon Voya Target Retirement is expected to generate 0.7 times more return on investment than Qs Moderate. However, Voya Target Retirement is 1.43 times less risky than Qs Moderate. It trades about 0.03 of its potential returns per unit of risk. Qs Moderate Growth is currently generating about -0.06 per unit of risk. If you would invest  1,332  in Voya Target Retirement on December 19, 2024 and sell it today you would earn a total of  13.00  from holding Voya Target Retirement or generate 0.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Voya Target Retirement  vs.  Qs Moderate Growth

Voya Target Retirement

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Target Retirement are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking indicators, Voya Target is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Qs Moderate Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qs Moderate Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Qs Moderate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Voya Target and Qs Moderate

The main advantage of trading using opposite Voya Target and Qs Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Target position performs unexpectedly, Qs Moderate can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Qs Moderate will offset losses from the drop in Qs Moderate's long position.

The idea behind Voya Target Retirement and Qs Moderate Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.